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Home Buying Tips

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Is a Simultaneous Closing on a Home Purchase Difficult?
by goldcoast on 

Is juggling difficult?
Not for a juggler, but someone learning to juggle wouldnít want to perform in front of an audience with bowling pins. The closest personal juggling project to buying-and selling a home on the same day is probably having a wedding. What makes a wedding complicated is the number of professional and personal parties and interests involved.
Real estate and financing a home are governed by a lot more rules, laws, mandates, and procedures than a wedding. Thereís also other households (and their children, pets, furniture, and boxes) that are involved in selling your home and then buying the next one.
Weíre agreeing to meet our clients at the closing table with, on average, around $400,000 in brokered money on hand. On a simultaneous transaction, weíre also hoping that the mortgage company or bank who is financing your homes buyer is showing up to the party armed with cash on hand Ö within a few hours of each
other.

Project management is the key to success.
A wedding planner (when hired) can corral all the vendors and parties and enact contingencies (and inflict penalties) when a band double-books, or a thunderstorm rolls in along with the bridal party. In my case, our caterer knew how to coordinate the locations, make sure we took time to eat dinner ourselves and act as the team lead based on our preferences.
In a real estate transaction we typically assume the project management role and quality control the process for our clients, plus keep an eye on the inbound mortgage money. If your buyer shows up to the closing empty handed, that will mean you too will be defaulting on your purchase transaction. Then the dogs and cats can get
edgy.

Boots on the ground are critical.
We like being in state, or at least drivable to the abutting states (NH and ME) where we are licensed to broker mortgages. I could not count the number of times Iíve needed to hop in a car and go problem-solve on behalf of a clientís initiatives. I canít imagine being a consumer and trying to communicate with an off-shore mortgage customer service representative hiding behind an App or a Bot.

Checking your to-do list and vetting are important.
The to-do list is constantly changing and to bring a static nature to the simultaneous process; it requires nimbleness and experience. Iíd suggest that any professional party involved in your buy and sell transaction be vetted in advance. Read all their reviews and get a reference or a referral, if possible.

If the band, bartender, caterer and site manager are all meeting for the first time on your wedding day itís going to be a raucous day. Same goes for your realtor, attorney, loan officer, and movers.


Since 1999 GoldCoast Mortgage Service, Inc. has arranged over 6,000 error-free, on-time, delivered mortgages at exceptional terms from our Cummings Center, Beverly, MA location. We have had the same phone number for 19 years and are in the top 70 of earliest licensed mortgage companies in the nation. In an age of technology-based applications you will find our guidance, knowledge, and process very enlightening, comforting and efficient. GoldCoast Mortgage Service, Inc. agents are licensed and arrange residential and commercial mortgages in MA, NH and ME.

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What is a Bridge Loan?
by goldcoast on 

A Bridge Loan is a second position mortgage on your outbound (former) primary residence. It is designed to extract equity from the departure residence to be used as a down-payment on the destination (future) primary residence.

How do I get a Bridge Loan?

In an ideal world you will never need one, or really want a Bridge Loan. It means that the project you are trying to accomplish is reactionary and not being proactively led.

Before circuit breakers were invented, a carefully placed penny could be used to circumvent the need for a fresh fuse if one was not available. The danger being that the circuit now could cause a fire if overloaded but allows your electricity to function. 

There are several natural circuit breakers in the home sale/buy process. For instance, if you canít sell your home then the lack of sale will prevent you from going on to the next purchase. There are more reasons potentially causing this that I don't have space to list here.

A Bridge Mortgage functions as the penny and allows you get into the new home while still carrying the old one.

At a minimum you will be handling and accruing interest on three mortgages, one of them with a balloon/demand feature. Tick tock Ö.

If you come into the need for a Bridge Loan, you should talk with us. We have provided guidance and consider ourselves experts in explaining the pros and cons of Bridge financing, as well several alternative solutions in lieu of the penny in the fuse panel. 


GoldCoast Mortgage, Inc., is one of the earliest licensed mortgage corporations in the nation. GoldCoast was founded, and fiercely protects, their extreme service model which puts the clientís needs ahead of corporate needs. In an age of technology-based applications you will find their guidance, knowledge, and process very enlightening, comforting and efficient. GoldCoast Mortgage Service, Inc. agents are licensed and arrange residential and commercial mortgages in MA, NH and ME.

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How do I get rid of PMI?
by goldcoast on 

Mortgage Insurance is a necessary step for getting into a home without putting a 20% down-payment. For the sake of this article lets posit you have a monthly mortgage insurance expense that is getting very tiring.

First up you need to ascertain if you have a conventional mortgage or a FHA mortgage (VA mortgageís, do not have monthly mortgage insurance). USDA and MassHousing require a separate explanation.

Letís start with a conventional mortgage (non-government mortgage). The FHA explanation on itís own MIP is another chapter that will come later. You pay mortgage insurance against your potential default. It is an insurance, thatís the ďIĒ in the acronym. While you derive a benefit from PMI (your ability to buy a home without a 20% down-payment) the insurance isnít for your protection. This is important to think about. Youíre not PMIís customer the lender is, even though you pay for it.

Since there are several PMI providers the removal rules will vary between customers but here are the three techniques that will drop PMI:

I. PMI DROPS AUTOMATICALLY
The dispatch date is pre-loaded into your amortization schedule with the lender. The payment after that date will not have the PMI payment. No action required. No call to your lender, or appraisal required. It is simply over. To figure out that date, take your purchase price and multiply that .78. Obtain (or create) an amortization table and slide your finger down to the value. The date that corresponds to that number is your last PMI payment. Congratulations. If you need help with an amortization table please ask us.

II. THE TIDE RISES
The sale prices for your neighbors houses have done up, way up. Like 20% up. This leads you to believe your house may have enough equity to ditch PMI. But that wonít happen on itís own. If you want to supersede the PMI contract you need to follow the PMI contract (see a sample on our website). You will probably need to obtain that. Step one is to obtain that contract or those instructions from your lender.

Review the rules presented to see if you are ineligible for PMI removal any reason (you must meet minimum time under PMI and cannot be past due on your mortgage). Youíll also notice that the bar may have been moved. Typically from .78 to .75 (but again each PMI company is different) which would require 25% equity. Do you think your mortgage lender will take your word on the value? Of course not. Youíll need to prove that via an appraisal at your own expense (est. $500). The appraisal needs to be performed by a licensed appraiser on the lenderís approved list, not your brother in law the realtor. Once you state (and prove) your case you can expect PMI to drop from you monthly payment and free up your cash flow. Congratulations Ö itís like getting a pay raise.

III. CUT THE LINE
You receive a sum of money from a bonus, tax refund, gift or inheritance and apply it to your mortgageís principal there for accelerating the amortization schedule and your position in it. While this moves you closer to your equity position it does not change the dispatch date. From here you need follow steps listed in THE TIDE RISES paragraph.

Regardless of which path you take the efforts are very worth your while. This endeavor may be your highest paying use of your time in 2018. Good luck. The GoldCoast Team is here to help. Any time and with even a hint of obligation to engage our services.

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When is the best time to refinance my HELOC?
by goldcoast on 
 

The best time to refinance your HELOC is now with the recent 2018 tax cuts to the home equity line interest deduction.  


Home Equity Lines of Credit often offer Sale rates Ė basically a low-rate that increases after year one. That low rate year encourages you to stack balances onto the HELOC that will take many years, perhaps decades to pay off.  


A common misconception is that you can jump from a HELOC to a fixed rate mortgage before mortgage rates increase.  Prediction of that dispatch date is difficult. The misconception arises from the fact that rates of a Fixed mortgages and HELOCís are driven by different forces.  


A HELOC rate is derived from a human controlled index, (The Federal Reserve sets the Prime Lending rate) whereas the mortgage rates are derived with the Yield of the 10-year Treasury Bond. Because bonds are a traded product they are market driven. Market driven products can rise or fall, without caps, at any time. There is no direct human influence on mortgage rates Ė only market influences.1 


Predicting the direction of mortgage rates requires knowing the direction of the 10-year treasury bond (a debt instrument). Knowing the direction of the 10-year bond would require knowing the how the stock market (equities) is going to perform. The investment cycle is complicated and routinely predicted wrong by Ivy League educated, seven figure earning traders.


So how do we guard against bumping into the 19.99% cap on your Home Equity Line of Credit. You posture defensively. Inquire about converting your balance to a fixed Home Equity Loan through your existing provider. If the rate that provider offers isnít palatable please talk to us about a no obligation refinance rate quote. We have offering that include No Closing Costs and all of our products, including Jumbo, come as fixed rates.  


CLICK HERE FOR FREE MORTGAGE ADVICE


John Donlon is the Co‐Founder of GoldCoast Mortgage, Inc., one of the earliest licensed mortgage corporations in the nation. GoldCoast was founded, and fiercely protects, their extreme service model which puts the clientís needs ahead of corporate needs. In an age of technology-based applications you will find their guidance, knowledge, and process very enlightening, comforting and efficient. GoldCoast Mortgage Service, Inc. agents are licensed and arrange residential and commercial mortgages in MA, NH and ME.  


1. Quantitative Easing was an exception to this. This is when the government purchased its own bonds, attempting to keep rates low. It worked Ö for a period of time. We are now engaged in the unwinding effect of that phenomena.  


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Should I refinance my HELOC?
by goldcoast on 
Yes, there is no better time to refinance your home equity line of credit. The recent 2018 tax cuts eliminated the interest deduction entirely on HELOC loans. 


Many people we talk with donít realize that a Home Equity Line of Credit (HELOC) is by definition two things: 


- A mortgage secured by a primary residence.


- Always an adjustable rate. If the debt has a FIXED interest rate then it is a Home Equity Loan (not Line). 


Home Equity Lines of Credit often offer sale rates Ė basically a gimmick low-rate to get you started which increases after year one. That low rate year encourages you to stack balances onto the HELOC that will take many years, perhaps decades to pay off.  


When advising on debt secured against your house we recommend matching the product with the financing (need) timeline.  


For instance, when building a home up to two years to draw on a line of credit is preferable. Remodeling kitchens or other structural work should be a one-year project. Many people use a HELOC to fund college tuition which can be four years or longer. 


Remember keeping an active balance on an adjustable rate past the draw period incurs interest rate risk.  


Common caps on HELOCís are 19.99% and almost all HELOCís have a trigger demand feature that calls for the balance to be paid back in 120 months. A $100,000 balance at the full rate would ďdemandĒ a $1,931/month payment every 30 day for a full decade.  


Therefore, we recommend converting the HELOC into a fixed interest rate loan as soon as the project need is completed. Especially now when the interest paid on the HELOC is no longer tax deductible. 


CLICK HERE FOR FREE MORTGAGE ADVICE


John Donlon is the Co‐Founder of GoldCoast Mortgage, Inc., one of the earliest licensed mortgage corporations in the nation. GoldCoast was founded, and fiercely protects, their extreme service model which puts the clientís needs ahead of corporate needs. In an age of technology-based applications you will find their guidance, knowledge, and process very enlightening, comforting and efficient. GoldCoast Mortgage Service, Inc. agents are licensed and arrange residential and commercial mortgages in MA, NH and ME.  

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Happy New Year
by goldcoast on 

Be at war with your vices, at peace with your neighbors, and let every new year find you a better person. Benjamin Franklin

As the year fades, life gives you another year to surprise the world with your talent; work hard and think big. We hope 2018 fills your life with success, kindness, and good luck.
The GoldCoast Mortgage Team

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How do I redo my Home Equity Line of Credit (HELOC) to make it tax deductible in 2018?
by goldcoast on 

The Trump tax cuts have eliminated the real estate tax deduction over $10,000 for 2018. This caused the mad rush at city and town halls the last few weeks to pre-pay 2018 real estate tax.


For folks who do not have a tax liability over $10,000 this does not seem like a smart play. Additionally, the IRS is saying they wonít allow the deduction in 2017 on tax billings that were not in 2017.


One big change not to be overlooked by anyone with a balance on their Home Equity Line of Credit is the cut to the interest deduction on a HELOC. It appears that the interest paid on a HELOC (established both before or after 2018) will not be deductible.


The old and new mortgage deduction law is outlined nicely in A Guide to 2018 Tax Changes published recently by The Annenberg Public Policy Center. The article is a valuable resource and covers all aspects of the tax law changes in 2018 from the Tax Cuts and Jobs Act.


Mortgage Deductions 


Previous law: Taxpayers who itemize their taxes can deduct interest payments on mortgage debt of up to $1.1 million. That includes up to $100,000 of home equity debt.

New law: For current mortgage holders, there is no change. But the deductible limit drops to $750,000 for new debt incurred after Dec. 31, 2017. Also, homeowners may not claim a deduction for existing and new interest on home equity debt, beginning Jan. 1, 2018. The mortgage deduction changes expire after 2025.


If you're carrying a balance on your HELOC it may prove best to convert it to a primary fixed rate mortgage as early in 2018 as possible. Primary mortgages (in first position) will be deductible up to $750,000. There does not appear to be a difference between a first mortgage that was used to acquire your residence or one that was used to consolidate a HELOC (refinance).  


Consulting with your accountant or tax professional is recommended prior to engaging in any financial strategy.  


CLICK HERE FOR FREE MORTGAGE ADVICE


John Donlon is the Co‐Founder of GoldCoast Mortgage, Inc., one of the earliest licensed mortgage corporations in the nation. GoldCoast was founded, and fiercely protects, their extreme service model which puts the clientís needs ahead of corporate needs. In an age of technology-based applications you will find their guidance, knowledge, and process very enlightening, comforting and efficient. GoldCoast Mortgage Service, Inc. agents are licensed and arrange residential and commercial mortgages in MA, NH and ME.  

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Merry Christmas
by goldcoast on 

"I will honor Christmas in my heart, and try to keep it all the year." - Charles Dickens


At GoldCoast Mortgage we're grateful for our clients, friends and family today and everyday of the year. Thank you for your support and enjoy the holidays surrounded by love and laugher!

John Donlon, President GoldCoast Mortgage

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JOHN DONLON - NMLS #4931
by goldcoast on 


I co-founded GoldCoast Mortgage in 1999. The name was selected at a meeting at the now defunct Goat Hill Grill and drawn from the North Shore region described by author Joseph Garland as ďBostonís GoldCoastĒ. Born in Beverly and I have never strayed far. After a brief stop in Salem my wife Kellie and I wound up Danvers where weíve been caring for a 1st period farmhouse for close to 20 years. I enjoy local coffee shops and often arrive to them without a mobile phone so that I can focus on the person Iím with. Iíve become addicted to hand splitting firewood (maul) and process about 6 cord/year. We vacation in PEI Canada where weíve gotten use to red dirt roads, absence of street lights, a brilliant evening star scape, and mastering four hour meals.

 

I have four children from grade school to high school and enjoy teaching them by example. The biggest gift we can give anyone is that of our attention.

 

Iíve handled recorded instruments on over a billion dollarsí worth of real estate. My appetite for learning, perfecting and growing is indefatigable. Whether thatís a blessing or a curse Iím often first car in the lot and/or the last to leave. If I can share lessons on real estate to save my clients heartache, then I have fulfilled my role as their advisor.

CLICK HERE FOR FREE MORTGAGE ADVICE

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JEFF ROLKE - NMLS # 1217216
by goldcoast on 

Jeff is a lifelong resident of the state of Massachusetts, he grew up in Millis, a small town southwest of Boston, MA. His first experience with the North Shore came with his freshman year at Salem State College in 2003 and he has remained a loyal resident of Salem ever since. At Salem State; Jeff earned a bachelor's degree in Criminal Justice, played for the championship winning lacrosse team and met his wife Janelle.


Spending his college summers working at a marina in Salem, MA has secured Jeff's love of living near the ocean and spending time on Salem Harbor. Jeff has held jobs in sales and customer service since graduation. He has moved to GoldCoast Mortgage from New York Life, handling insurance and investments for his clients around Massachusetts.


Jeff joins GoldCoast Mortgage as a loan officer focusing on real estate financing needs for homebuyers, homeowners, business owners, executives, and public plus private employees. GoldCoast Mortgage is a proudly independent mortgage broker servicing over 5,000 clients with precision, compassion and education.

CLICK HERE FOR FREE MORTGAGE ADVICE

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